Technology Policy and Management Course 38E00100 "Immaterial Property Rights", Spring 2007, 1st Period. IMMATERIAL PROPERTY SYSTEM 31st January 2007

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1 Helsinki School of Economics Technology Policy and Management Course 38E00100 "Immaterial Property Rights", Spring 2007, 1st Period IMMATERIAL PROPERTY SYSTEM 31st January 2007 WELCOME! Olli Ilmarinen, Product Manager, M.Sc. (Business Administration) National Board of Patents and Registration (NBPR) 1 CONTENTS: 1. National Board of Patents and Registration in brief 2. Immaterial Property Rights - Forms of protection: formal and informal - Patents as source of information 3. Business implications - IPR Strategy - Case Examples - Exercise 4. Summary 2 1

2 1. National Board of Patents and Registration (NBPR) in Brief

3 NBPR s mission is: to advance technological and economic progress by supporting creativity, entrepreneurship and cooperation within industrial networks resulting in improved competitiveness of Finnish industries 5 NBPR maintains a wide network of international contacts. Our main co-operation partners comprise: the World Intellectual Property Organization (WIPO) the European Patent Organization (EPO) the Office for Harmonization in the Internal Market (trademarks and designs) (OHIM ) the Industrial Property Offices in Denmark, Estonia, Iceland, Norway and Sweden More information can be found in English at 6 3

4 REGIONALISED NBPR Employment and Economic Development Centre Local Register Office Innovation Agents (15) Enterprise Agency Enterprise Agency Service Point Chamber of Commerce Innovation Agents at University (12) InnoFinland regions 7 2. Immaterial Property Rights Forms of protection - formal and informal protection Patents as source of information 8 4

5 IPRs consist of Immaterial Property Rights IPR: Immaterial Property Rights Intellectual Property Rights Industrial Property Rights Intellectual Property Rights Written works Audiovisual works Pieces of art Software Industrial Property Rights Trade names Patents Utility models Protection of designs Trademarks 9 Industrial Property Rights: Tool Protects Valid for Patent Product, equipment or method 20 years (in same cases 25 years) Utility Model Product or equipment 10 years (4+4+2) Trademark Means to differentiate in a market Permanent, to be renewed every 10 years Protection of Designs Shape of product 25 years ( ) Trade Name Business (company) name Permanent (for operational business) 10 5

6 Industrial Property Rights are tools to create competitive edge! IPRs protect innovations IPRs support product development IPRs empower marketing Trade Name Patent Utility Model Turning an idea into a product in the market 11 Protection of Design Inventions Establishment of a company Trademark R & D Product Development Marketing Market research Industrial Property Rights Gives a company an effective competitive tool by giving an EXCLUSIVE RIGHT to utilise the protected solution commercially Every operating business owns Industrial Property Rights its trade (company) name if nothing else Industrial Property Rights should be used to: protect the results of product development protect unique competence and know-how 12 6

7 Intellectual Property Rights: Right Copyright Trade secret Protects Work (written, audiovisual, piece of art) Information, which has commercial significance Valid for Lifetime + 70 years Until becomes public 13 Formal vs. Informal Protection? 1. Formal Protection (regulated by authorities) Patents Utility models Trademarks Protection of Designs Trade names 2. Informal Protection Contracts (partners, customers, employees) NDAs (non-disclosure agreements: companies, individuals) Copyrights (note: copyrights are also applied to software) Trade secrets (confidentiality) 14 7

8 FORMAL Methods of Protection: Patents Trademarks Designs NDAs Contracts Protection of Databases and Networks Protection of Technology Short Innovation Cycles Work Deployment Partner Management Sharing of Information Engagement of Personnel Commitment by Partners Customer Relationships INFORMAL 15 What is required in order to patent? 1. Inventiveness (must involve an inventive step) 2. Novelty (it has to be a unpublished invention) 3. Industrial applicability (Industrial applicability is understood in a broad sense - besides conventional industry, it includes the methods and devices needed in commerce, building industry, farming, forestry, gardening, fishing, handicrafts etc.) = You can patent a device, a product, a process for making a product, or a new use for a previously existing product (= only the embodiments of ideas, not solely an idea as such). 16 8

9 Benefits of formal protection: - why a patent was developed? 1. To maintain and develop technical data Development build on development 2. To publish inventions and new technology to wider audience (globally) 3. To define the invention and specify the ownership of property rights 4. To stimulate product development 17 Patent is public document Patent is periodical and territorial exclusive right to utilise an invention commercially = patent has to be renewed (and is valid max. 20 (25) years) = effective only in those countries it has been validated Inventor is granted this exclusive right by making public the invention (i.e. the technical solution) Once the invention becomes public it cannot be patented again (since there is no novelty anymore) 18 9

10 Patent documents Patents are public source of information - also for companies who themselves are not involved in patenting Each year, over a million new patent documents are published in several languages in over 100 countries In total, there are over 50 million patent documents, devided into patent classes. Patent documents are the largest single source of technical infomation in the world 4 million of the patents are valid (=exclusive right of the patent holder), i.e. the rest 46 million are free for use % of the innovations described in patents will not be published anywhere else 19 Patent information Industrially viable solutions Extensive global coverage 20 10

11 Example: number of patent publications related to hand-held & machine tools by the end of 1990 s Patentti FI Worldwide Japan USA Germany UK Sweden Finland Patent databases at Golbal patent information (incl. specifications) in Internet, user interface in multiple languages PatInfo register (in Finnish) Basic information on Finnish patent applications, patents and utility models FI-EP register Basic information on European patents in force in Finland HYMAnetti (Utility model register) Basic information on claim and picture pertaining to each utility model registered in Finland 22 11

12 fi.espacenet.com 23 fi.espacenet.com 24 12

13 Sources for preliminary search of information on other formal IPRs: NBPR s database of trademarks EU trademarks Domain names Trade names Family names US Patents com/patents 25 Industrial Property Rights are tools to create competitive edge! IPRs protect innovations IPRs support product development IPRs empower marketing Trade Name Patent Utility Model From an idea into a product in the market 26 Protection of Design Trademark Sources of Technical Information Sources of Competitor Information 13

14 R&D inputs (in EU 15): % is redundant! In Finland this means billion euros annually - allocated wrong, spent ineffectively, or totally wasted (overlapping efforts, inventing something that has already been invented AND protected by others,...) = Allocation of R&D investments can be improved by the use of patent information! 27 : 1. Protection of know-how and competence 2. Source of information 28 14

15 3. Business implications - IPR Strategy - Case examples - Exercise 29 Combined Use of IPRs: Cap, patented Bottle, registered desing Coca Cola, registered trade mark Label text, copyright The Coca Cola Company, trade name 30 15

16 Business cooperation under license: Decoration of elevator car interiors, combining the KONE Deco elevator solution and Marimekko designs 31 IPR Strategy Status (2004): 1. OCCASIONAL 80-90% of SMEs in Finland! 2. PLANNED Patent intensive industries (machine tools, instruments, gadgets etc.) 3. STRATEGIC Global companies such as Nokia, Kone, Metso, Wärtsilä, Kemira, Outokumpu, Orion,. Biotech and pharmaceutical industries 32 16

17 Patent applications in Finland in 2005 (2004) Company 1. Metso 2. Nokia 3. Kone Cranes 4. VTT 5. ABB 6. Wärtsilä 7. Outokumpu 8. Kemira 9. M-real 9. Sandvik Tamrock 10. Elisa Number of appl. 125 (149) 109 (176) 57 (61) 48 (51) 30 (48) 27 (16) 25 (67) 14 (19) 13 (12) 13 (17) 12 (15) Source: NBPR

18 IPR Strategy at Company Level: Can we manage our IPRs? 1. Can we monitor potential infringements (violations) and defend our IPRs? How and by whom? 2. How can we find out if there are any obstacles for our operations and product development - due to others IPRs affecting our production, or marketing? 3. How much should we invest into our own IPRs? 4. WHO SHOULD TAKE CARE OF THESE? 35 Workbook for Management Immaterial issues in business 2st edition, 2006 Available as a printed copy, download version (pdf) and html

19 Management Personnel, resources Protecting policy? Implementing? Responsibilities? Fostering company know-how? Employers inventions? Intellectual property? Competitors? Trends? Markets, surveys Financing How to convince financier? Risk analysis? IPR Strategy Avoiding redundant R&D? Monitoring technical development? Freedom to operate? How to defend infringements? Standing out in the market? Marketing Disclosing business critical information? Make or Buy? Licencing? Partnerships? How to protect spearheadtechnology? Key technology? Technical solutions? Evaluating R&D project? Production methods? Production Possibilities to protect technology? Product development CASES 38 19

20 CASE 1: Company A had invented a new product. After 0-series ( test production series ) they found out that their competitor had already patents and/or patent applications for the exactly same product in couple of countries - but not in Finland. Because business opportunities were analysed to be good and the product was forecasted to become profitable globally, the company decided to investigate in which countries their competitor actually had the patents. They found out that there was no patents/patent applications in several large markets (i.e.countries) at all. Also, the invention had already become public (no novelty aspect that is required to obtain new patents). Therefore Company A was free to market the product in those countries where their competitor had no patents in force, being able to make significant profit out of the investment. 39 CASE 2: Company C was accused by another company because of a potential IPR infringement right after the launch of their new paper mill production line machinery product. Only at this point Company C found out that their new product included some components - supplied by their own subcontractor - which had been manufactured without proper rights, which were owned by Company B, their competitor. This infringement would have been fully avoided if the subcontractor had been aware of the patents of their competitor and e.g. aqcuired a licence for the technology. Even if the Company C did not offend any IPRs on purpose, Company C was held responsible for the infringement, which they know nothing about before it was too late

21 CASE 3: 41 EXERCISE (in groups of 3-5 persons): 1. Discuss in groups what are: a) Benefits of IPRs and IP system b) Handicaps / downsides of IPRs and IP system (if any) 2. List your findings and be ready to present your results 42 21

22 Benefits 1: Managing business risks and increasing competitiveness by: Speeding up the product development process (time-to-market) Avoiding re-inventing the wheel Protecting one s unique competence and know-how (e.g. deciding how to share information in networks) Finding potential partners and subcontractors (make-or-buy, licencing) Finding companies interested in licencing (partners, marketing channels) Differentiating the products Technical (technology) and competitor surveillance Avoiding infringements against others rights 43 Benefits 2: Increasing investors interest by: Clarifying how the outputs of the R&D project will be protected Analysing the environment, technology and knowing of existing IPRs in advance Protecting the technology, desing, brand and/or other IPRs (to be developed) Supporting technology transfer, technology & knowledge sharing and innovation networks 44 22

23 Some potential downsides of patents: 1. It takes too much money to get a patent? Compare short-term losses to long-term profits A patent is an investment into the future! 2. It takes too much time to get a patent? Compare short-term wins to long-term profits (e.g. being able to licence the patented technology) Start early enough (e.g. to keep the market-window) 3. It takes too much effort to get a patent? Consider using expert services (NBPR, patent offices, patent agents, etc.) 45 Some potential downsides: 4. You do not want to publish the invention OK, if the decision is reasonable (compare short-term wins to the business risks, such as decrease in long-term profits) Instead, you must use other forms of protection (like contracts, NDAs,...) 5. Our invention is not inventional enough? You have to find this out - as a fact You may consider utility model option instead 46 23

24 5. Summary 47 Why IPRs are important? Over 80 % of the value creation of the companies is based on human capital! This capital should be turned into IPRs, which must be managed and protected like any other assets of a company

25 : 1. Protection of know-how 2. Source of information 3. Backbone for IPR Strategy - to develop and defend IRPs! 49 Finnish Innovation System Fostering Creativity IP System at National Level EFFECTIVENESS, COMPETITIVENESS, GROWTH EMPLOYMENT IDEAS, ENTREPRENEURSHIP INNOVATION- FRIENDLY ENVIRONMENT

26 NBPR s Business Services (International patent database) Immateriaaliasioiden huomioiminen liiketoiminnassa Johdon työkirja Tehoa tuotekehitykseen Patenttitiedon hyödyntäminen teknisen ja kilpailijatiedon lähteenä Tavaramerkkiopas PRH-ostoskoripalvelut 51 Mirja Lehikoinen THANK YOU! For more information, visit our website at or contact: Olli Ilmarinen Tel

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